Key takeaways
- Never just overwrite a stock number. Record what changed and why, so you can see where stock goes.
- Use a short list of reasons: damaged, expired, theft or loss, returned, and correction. Patterns in the reasons show you where money leaks.
- A written-off item still cost you money. Recording it separately is how you see the real cost of waste.
Why stock numbers drift
Stock rarely goes wrong because of sales. It goes wrong because of everything else: a bottle dropped in the aisle, a tin that expired, a customer return put back on the shelf, a miscount from last month. None of these go through the till, so none of them reach your records unless you write them down.
That is what a stock adjustment is: a change to stock that is not a sale or a delivery. A write-off is an adjustment that removes stock you can no longer sell. Done well, adjustments keep your numbers honest. Done badly (or not at all), your records slowly drift away from the shelf.
The reasons worth recording
| Reason | Example | What it tells you |
|---|---|---|
| Damaged | Cracked bottle, crushed box, leaking bag | Handling or storage problems |
| Expired | Product past its date, removed from sale | Over-ordering or poor rotation |
| Theft or loss | Item missing, cannot be explained | Security or process gaps |
| Returned | Customer brought it back and it is sellable | Product quality and policy use |
| Correction | Count shows 14, system says 17 | Recording mistakes, or an old error found |
Keep the list short. Five or six reasons are easy to remember, and easy to analyse. Do not invent a new reason each time. If you cannot decide between theft and loss, use one reason for both, because you often cannot tell. For loss prevention itself, see reduce stock loss.
Why a log beats overwriting the number
The easy way to fix stock is to cross out 17 and write 14. It is quick, but it throws away the answer to the only question that matters: why was it 17 when it should have been 14?
A movement log keeps every change as its own line: what, how many, when, and why. Stock on hand is the total of those lines. The benefits are practical:
- You can trace a problem. If a product keeps going missing, the log shows how often and when.
- You can see waste. Totalling damaged and expired lines for the month tells you what waste costs.
- You can undo a mistake. If someone enters the wrong number, you add a correcting line instead of losing the history.
- You can hold people to account. A change with a reason and a date is harder to quietly bury.
Worked example: one month of adjustments
A shop keeps a simple adjustment log. At the end of the month the lines for one product, 1L juice (cost $2.00 each), look like this:
| Date | Reason | Change | Value at cost |
|---|---|---|---|
| Week 1 | Damaged | -2 | -$4.00 |
| Week 2 | Expired | -3 | -$6.00 |
| Week 3 | Returned | +1 | +$2.00 |
| Week 4 | Correction (count) | -2 | -$4.00 |
Net change: -6 units, or $12.00 of stock at cost. That is the same as selling 6 juices and getting nothing. If the juice sells for $3.50 each, you would have made $9.00 profit from those six. So that month the real cost of waste was $12.00 of stock plus $9.00 of profit you did not earn. Seeing three entries from "expired" and "damaged" also suggests ordering fewer and storing them away from the aisle. Without the log you would only see that you were six short.
A simple adjustment routine
Record it at the time
Do it when you find the problem, not at month end. Memory is bad with small things.
Choose one reason
From your short list. No reason means no entry.
Remove the item physically
Take damaged and expired stock off the shelf so it cannot be sold by mistake.
Review monthly
Total each reason. A reason that keeps growing is a problem to solve.
Only the owner approves large ones
Large write-offs should be seen by the owner, not just a cashier.
Mistakes that make adjustments useless
The most common problem is recording a change with no reason, or with a vague one like "fix". An adjustment without a reason cannot be analysed, and a month of vague ones tells you nothing. The second is delay: waiting until the end of the week to write down what was broken on Monday means some of it will be forgotten, and the rest guessed.
A third is using corrections to hide a loss. If your count is three short and you record it as a "correction" every month, you have a loss problem hiding under a tidy label. A good rule: a correction is for a mistake you can explain, such as a delivery counted wrong. Gaps you cannot explain go under loss.
Last, resist the urge to adjust small differences to zero every time. If one product is off by one most weeks, that is a clue worth following (a pricing mix-up, a similar product being rung up instead) and is more valuable than a clean number.
How Shopkeepa helps
Shopkeepa keeps stock as a ledger of movements instead of one number you overwrite. Every change has a type: sale, received, return, damaged, expired, theft or loss, correction, or count. The stock you see for a product is simply the total of its movements, and you can open any product to see the full history.
To record a write-off, pick the product, enter how many, and choose the reason. A stock count that finds a difference creates a correction or count movement rather than silently replacing the old number. That is how you can see waste by reason, and how a mistake can be traced instead of hidden. Shopkeepa counts whole units, so enter whole numbers only. Learn more about inventory tracking. Shopkeepa is in development, and early access shops will help shape it.
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